For decades, people have discussed the lack of technology skills in the market. And it’s not just a skills mismatch. The number of skilled people needed is just not there. According to forecasts developed by International Data Corporation (IDC) and empirica for the European Commission, we estimate that by 2020, there will be a skills gap of almost 750,000 IT jobs across the European Union.
For years the focus has been on increasing the talent pool by attracting more young people into science, technology, engineering and mathematics (STEM) studies. However, these initiatives have just not done the trick. Consider the growth in technology adoption to run operations and deliver products and services to customers — and also to use as integral parts of these products and services — and it’s clear the skills challenge is unlikely to dissipate anytime soon.
The skills challenge has a real financial impact. IDC has estimated that by 2020, 90 per cent of all European organisations will have adjusted project plans, delayed product or service releases, or lost revenue from lack of IT skills, resulting in £70 billion of lost revenue annually.
Put another way, with rapidly changing technologies transforming businesses and disrupting markets, companies that can’t access the constantly evolving skill sets are falling behind. Consequently, there is a “war”, or at least a “grab”, to attract the people with the capabilities and expertise needed to excel in digital transformation.
The types of skills needed are wide-ranging, from data centre transformation, to cloud migration, to knowing how to undertake a program of strategic digital transformation. The skills of IT professionals, their managers, IT leaders and even the IT acumen of the business stakeholders will influence both the project timeliness and the ultimate business value of the most important IT initiatives.
Another issue adds to the challenges: The half-life of skills is decreasing. With new technologies being introduced at increased speed, the demand for new skills and competencies is accelerating while other skills wane in importance. Data from IDC’s Technology Skills Survey in December 2018 shows that the importance of some skills which would have been low on the list of priorities just a couple of years ago — such as artificial intelligence (AI) capabilities — are now ranked highly across role groups in the IT department.
Source: IDC’s Technology Skills Survey, December 2018 (Europe n=622)
So what can we do about the skills gap? Note the “we” here — this is not an issue that can be solved by anyone on their own. Stakeholders must collaborate to improve the situation.
Just trying to go out and hire in the market will not be enough. First of all, for many skills, the numbers of people needed are just not there. Secondly, the salaries for the really scarce skills are prohibitive for many organisations as well. So, stakeholders (technology vendors, employers, the education system and governments) need to come together to find practical, actionable solutions that work on two fronts:
- Increasing the skills pool. As mentioned, the focus has been on attracting young people to pursue degrees in STEM fields. But there is a growing realisation that this should be only one approach. Graduate programs and apprenticeship schemes have grown in the past few years as many employers have concluded that the importance lies in the ability to learn and also in the possession of softer skills, such as communication and collaboration. The rest can be taught as and when needed
- Retraining, reskilling and upskilling the existing workforce. This avenue offers considerable advantages, such as tapping talent who have already demonstrated a good fit with the company’s culture. It is also part of retaining talent and creating an ongoing learning culture, which will also help in attracting talent — and in making the workforce more adaptable to the changing needs of the organisation.
Concepts of how and when to train employees are changing significantly — and more changes are to come. IT vendors almost universally have initiatives in place where they are cooperating with universities to set up specific technical training programs. This is now also spreading to other employers with a large IT employee base. Examples of this new thinking about training include DXC Technology’s Open Badges Network, focused on AI and DevOps, Wipro’s partnership with Sheffield Hallam University in the United Kingdom around apprenticeships, and — with a focus on increasing the talent pool — the AWS re:Start programme in the United Kingdom.
Whichever approach your organisation is taking, it probably needs to do more. The skills issue will just get more pressing as we see technology increasingly influence the way that businesses work, develop their products and services, and engage with customers. So, workforce training needs to be elevated to a strategic initiative. Acquisition of new talent with the right expertise is costly. Constantly updating the existing skills of the current employee base is less so — and good talent planning should ensure that the organisation’s current and future business needs are met. However, unless workforce training is seen as a strategic initiative, tied to the medium- and long-term development goals and other enterprise-wide priorities of the business, it is unlikely that isolated initiatives will deliver the intended benefits.